WAEC - Economics (2016 - No. 8)

What effect will an increase in price have on the total revenue of a firm whose product has inelastic demand? total revenue will
increase
fall
fluctuate
remain unchanged

Explanation

if prices for inelastic goods are increased, the total revenue increases, but it would lead to a small decrease in quantity demanded. This means that firms that deal in inelastic goods or services can increase prices, selling a little less but making higher revenues.

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